Bk Accounts Reporting Question

I believe the individual accounts included in the BK can be reported for up to 7 years and the BK can be reported for up to 10.

-Peace, Dave

 

Dea Iam,

If a bk is a 7, it's 10 years. If it's a 13, the CRA's have all agreed to remove in 7 years although you won't see that in the law.


If you have aspecific question spell it out and we'll see if we can help.

 

Hi iam,

I read your other thread, yes someone said that BK accounts would be taken over, kinda assimilated and be reported as long as your BK was.

Another posted, I think it was Why Chat, correcting that information.

The dates should be correct and actually should be before your BK date, the latest date would be the BK filing date.

In a perfect world, where everyone plays by the rules, your individual BK accounts would fall off on their own before the individual BK listing did.

The commencement of delinquency date is specifically required to be reported by information furnishers to the CRA within 90 days of a listing -- though I've yet to see a CRA use that terminology in their reports. That's part of their game for the moment.

When the FCRA was changed the reporting date for the 7 years became a sure thing and even BK doesn't change it.

I would be in your best interest to have the dates accurately reported.

There's a FTC opinion letter on the interpretation and application of the date provision.

Sassy

 

http://www.ftc.gov/os/statutes/fcra/harvey.htm


December 23, 1997

Jack Harvey, III
Regulatory Analyst
ALLTEL Information Services
Financial Services Division
4001 Rodney Parham Road
Little Rock, AR 72212-2496

Re: Sections 623(a)(3) and 623(a)(5) of the Fair Credit Reporting Act

Dear Mr. Harvey:

This is in response to your letter dated September 4, 1997 concerning the responsibilities of furnishers of information to consumer reporting agencies.

First, you ask whether a furnisher of information may cease reporting information disputed by a consumer until the furnisher and consumer have resolved the dispute. You note that ALLTEL believes it best to cease reporting disputed information until a resolution of the dispute is reached in order to be fair to the consumer and to supply the most accurate information for use by others in making business decisions concerning that consumer.

Section 623(a)(3) of the Fair Credit Reporting Act ("FCRA") concerns the reporting of information to consumer reporting agencies once the consumer has notified the furnisher that information is disputed. That section states that when a consumer disputes the completeness or accuracy of any information furnished to a consumer reporting agency, the information in question may not then be furnished without notice that it is disputed by the consumer. That provision addresses the furnisher's obligation only when the furnisher continues to report disputed information. The statute is silent on the matter of the furnisher ceasing to report information while it is investigating the dispute. It is thus the opinion of the Commission staff that a furnisher that temporarily ceases to report disputed information while it investigates the matter, and then either (1) corrects the information if its investigation results in agreement with the consumer or (2) reports the item as disputed by the consumer where that is the result of the investigation, would comply with Section 623(a).

Second, you ask for clarification of the requirements concerning the reporting of delinquent accounts, specifically the requirement that the furnisher report the date of the commencement of the delinquency that immediately precedes a collection action, charge to profit or loss or other similar action. You note that compliance with this provision presents problems for data processing systems, particularly where an account has been delinquent for several payment periods prior to being placed for collection or similar action. Further, you note that it is your understanding that an alternate date, such as the due date or paid-to date at the time of the collection activity, would be sufficient for compliance purposes. I understand from my discussion with you that you define the "paid-to date" as the due date of the last paid periodic installment.

Section 623(a)(5) of the FCRA concerns the duty of furnishers to provide a notice of the delinquency date of accounts to consumer reporting agencies. This section provides that persons who furnish "information to a consumer reporting agency regarding a delinquent account being placed for collection, charged to profit or loss, or subjected to any similar action shall . . . notify the agency of the month and year of the commencement of the delinquency that immediately preceded the action." The provision is clear that furnishers must provide to consumer reporting agencies the month and year of the commencement of the delinquency that immediately preceded placement for collection, charge to profit and loss, or similar action. Thus, under the plain language of the statute there is no allowance for the use of an alternate, later date; you must use the statutory date for reporting. Use of the "paid-to-date" as that term is used in your accounting system is not acceptable.(1)

The legislative history indicates that Congress included the requirement of Section 623(a)(5) so that there would be a uniform date certain by which all consumer reporting agencies would compute the seven-year reporting period for adverse items of information. It was the intent that the seven year reporting period begin with the commencement of the delinquency rather than any other date.(2)

The views set forth in this letter are the views of the staff and are not binding on the Commission.

Yours truly,

Cynthia S. Lamb

Endnotes:

1. On the other hand, we would not challenge a decision, driven by administrative convenience, to use a date certain that was always earlier than the commencement of the delinquency, as there would be no consumer injury resulting.

2. H.R. Rep. No. 103-486, 103rd Cong., 2nd Sess. 35, 51 (1994); S. Rep. No. 103-209, 103rd Cong., 1st Sess. 15, 25 (1993); H.R. Rep. No. 102-692, 102nd Cong., 2nd Sess. 28, 71 (1992).

 

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580

Division of Credit Practices
Bureau of Consumer Protection
~
Clarke W. Brinckerhoff
Attorney
-
(202) 326-3224


August 31, 1998

Mr. Clifford A. Johnson
1917 Surrey Trail
Bellbrook, Ohio 45305

Re: FCRA §§ 605(c) and 623(a)(5) - "Commencement of the delinquency"

Dear Mr. Johnson:

This responds to your request for our views concerning the calculation of the period for which a consumer reporting agency ("CRA") is permitted to report accounts that have been charged off, placed for collection, or subject to similar action, under the amended Fair Credit Reporting Act ("FCRA"). You report that the following series of events occurred with respect to one of your credit accounts:

"My last payment was received by the creditor 12/96. My payments were due monthly and I missed the 1/97 payment and all subsequent payments culminating in a charge off. This creditor does not report to the credit bureau until the account is 90 days delinquent. . . . The creditor contends that the delinquency did not occur until 3/97 because that is when they first reported it."

Section 623(a)(5) requires a creditor that reports a chargeoff to a CRA to notify the agency (within 90 days of reporting the account) of "the month and year of the commencement of the delinquency that immediately preceded" the chargeoff. Section 605(a)(4) provides that the credit bureau may report the chargeoff for seven years. Section 605(c)(1) provides that seven year period begins 180 days from that date. In the scenario your reported, it is our view that the delinquency that led to the charge-off "commenced" in January 1997, the month the first payment was missed. Thus, that is the month and year that the creditor must report to the CRA, and that the CRA must use to calculate the time period dictated by Section 605.

We are not in accord with the contention that the date "when (the creditor) first reported" the chargeoff to the CRA constituted the start of the delinquency. Sections 605(c)(1) and 623(a)(5) were recently added to the FCRA to correct the ineffectiveness of the previous FCRA, under which the date that started the seven-year period was uncertain or under the control of the creditor.(1) The legislative history of these provisions makes it clear that they were designed to correct the often lengthy extension of the period that resulted from delayed creditor action:

Current law generally prohibits consumer reporting agencies from including in a consumer report accounts placed for collection or charged to profit and loss which antedate the report by more than seven years. The Committee is concerned that this seven year limitation is ineffective. In some cases, the ... action occurs months or even years after the commencement of the preceding delinquency. ... Consequently, the consumer report may contain such information even if the delinquency commences more than seven years before the date on which the report is provided to a user.

The Committee bill specifies that the seven-year period with respect to information concerning a delinquent account charged to profit and loss . . . may begin no more than 180 days after the commencement of the delinquency immediately preceding the ... action.

S. Rept. 104-185, 104th Cong., 1st Sess. 39-40 (emphasis added).

Thus, Congress intended to establish a date certain -- the start of the delinquency -- to begin the obsolescence period (now seven years, plus 180 days).(2) The alternate view stated to you (that the date of reporting controls) is at variance with both the plain language of these amendments, and the intent of Congress in enacting them.

In sum, we believe that the phrase "commencement of the delinquency that led to the action" in Sections 605(c)(1) and 623(a)(5) of the FCRA should be construed according to its normal meaning. If a consumer falls behind on an account and never catches up, the delinquency has its "commencement" when the first payment is missed. From that point on, the account is past due and thus delinquent.

The opinions set forth in this informal staff letter are not binding on the Commission.

Sincerely yours,

Clarke W. Brinckerhoff

 

http://www.ftc.gov/os/statutes/fcra/amason.htm

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580


February 15, 2000

Ms. Alaina K. Amason
14155 Shire Oak
San Antonio, TX 78247

Dear Ms. Amason:

This responds to your letter concerning the time limitations imposed by the Fair Credit Reporting Act ("FCRA") on the reporting of chargeoff accounts by a consumer reporting agency ("CRA," usually a credit bureau). We list your inquiries on this topic below in italics, with our replies immediately following each item.

1. What reporting limits does the FCRA provide with respect to chargeoffs, and how long have they been in effect?

Section 605(a)(4), which has been in effect since the FCRA became effective in April 1971, has always prohibited CRAs from reporting chargeoffs that are more than seven years old.(1) Section 623(a)(5), which became law in September 1997, requires a creditor that reports a chargeoff to a CRA to notify the agency (within 90 days of reporting the account) of "the month and year of the commencement of the delinquency that immediately preceded" the chargeoff. Section 605(c)(1) provides that the seven year period begins 180 days from that date. Both provisions were part of the major revision to the FCRA that were enacted in 1996.(2)
2. Is the reporting period extended if (A) the original creditor sells or transfers the account to another creditor, (B) the consumer responds to post-chargeoff collection efforts by making a payment on the debt, or (C) the consumer disputes the account with a CRA? Does it matter whether the 7-year period has expired when any of these events occurs?

No. In enacting the new provisions discussed above, Congress intended to establish a date certain -- 180 days after the start of the delinquency that led to the chargeoff -- to begin the obsolescence period. It did so to correct the often lengthy extension of the period that resulted from later events under the original FCRA. Enclosed are two staff opinion letters (Kosmerl, 06/04/99; Johnson, 08/31/98) that discuss the impact of these provisions, and the legislative history relating to their enactment, in more detail. Because the commencement of the seven year period is now described with some precision by the statute, it is our opinion that none of the subsequent events you listed -- sale of the charged off account by the creditor, or a payment on or dispute about the account by the consumer -- changes the allowable period for a CRA to report a chargeoff.
3. Since Sections 623(a)(5) and 605(c)(1) provide new rules for calculating the 7-year period that became effective in 1997, do chargeoff accounts now have different obsolescence periods depending on when the chargeoff occurred?

Yes. Section 605(c)(2) states that the section "shall apply only to items of information added to the (CRA) file of a consumer on or after" 455 days after enactment, or December 29, 1997. Therefore, a chargeoff reported to a CRA on or after that date is subject to the new commencement-of-the-delinquency method of calculating the obsolescence period set forth in Sections 623(a)(5) and 605(c)(1). On the other hand, a chargeoff reported to a CRA before December 29, 1997, is not covered by the new provisions, as discussed in one of the enclosed letters (Kosmerl, 06/04/99). If a credit account was reported as a chargeoff before that date, the Commission's view has been that it can be reported for seven years from the date the creditor actually charged it off.(3)
The opinions set forth in this informal staff letter are not binding on the Commission.

Sincerely yours,

Clarke W. Brinckerhoff


--------------------------------------------------------------------------------

1. Section 605(b) provides that there is no time limit applicable to a report made in connection with credit involving a principal amount (or insurance with a face amount) of $150,000 or more, or employment for a salary of $75,000 or more. Prior to September 1997, those amounts were $50,000 and $20,000, respectively.

2. The Consumer Credit Reporting Reform Act of 1996 (Title II, Subchapter D, of Public Law 104-280, signed into law on September 30, 1996), made many other changes to the FCRA.

3. Commentary on the Fair Credit Reporting Act, 16 CFR Part 600 Appendix, comment 605(a)(4)-2. 55 Fed. Reg. 18804, 18818 (May 4, 1990).